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Phillips 66, Kinder Morgan and HF Sinclair have reached a final investment decision (FID) to move forward with the proposed $5 billion Western Gateway Pipeline. This pipeline is a 1,300-mile refined products system. Also, it’s designed to create a new fuel supply route across the western United States. This project alongside the NESE Pipeline will be crucial in ensuring energy security in the US.

Stake Ownership

Moreover, the companies have finalized a joint venture agreement under which Phillips 66 will own 49.9% of Western Gateway, Kinder Morgan 35.1% and HF Sinclair 15%.

Also, the proposed system would connect St. Louis, Missouri, and expanded Gulf Coast origin points with markets in Arizona and California.

Furthermore, the Western Gateway is designed to transport 230,000 bpd of refined products. Also, it would allow future capacity expansions with limited additional capital and no new pipeline construction.

Major Project Component

Moreover, a major component of the project is approximately 900 miles of new 20- and 24-inch pipeline extending from Borger, Texas, to Phoenix, Arizona. Phillips 66 will construct and operate the new-build segment.

Additionally, Kinder Morgan will contribute its existing SFPP East Line between El Paso, Texas, and Phoenix and Tucson, Arizona, as well as its SFPP West Line between Colton, California, and Phoenix. Also, the West Line would be reversed to transport refined products east-to-west into California. Kinder Morgan will continue operating both pipelines.

Support Infrastructure

Supply to Western Gateway would also be supported by Phillips 66’s existing Gold Pipeline. This pipeline connects with the Explorer Pipeline. Also, the Gold Pipeline would be reversed to move refined products toward Borger and into the new system.

“The final investment decision reflects the strength of this industry partnership,” Phillips 66 Chairman and CEO Mark Lashier said. “By combining the capabilities of Phillips 66, Kinder Morgan and HF Sinclair, Western Gateway is expected to strengthen fuel supply reliability and deliver a more cost-effective, resilient path for growing markets across the West.”

Moreover, Kinder Morgan CEO Kim Dang said the project combines new and existing infrastructure to improve fuel supply reliability across the region.

“This project brings together strategic supply access, existing infrastructure and experienced operators to improve affordability and assurance of supply for customers in the Western United States,” Dang said.

Cost

Western Gateway has an estimated enterprise value of approximately $5 billion. Furthermore, Phillips 66 expects to contribute approximately $2.5 billion in cash, while HF Sinclair will contribute about $750 million and Kinder Morgan approximately $250 million.

Additionally, once the new Borger-to-Phoenix pipeline is completed, Kinder Morgan’s SFPP East and West Line assets will be contributed to the joint venture at a value of approximately $1.5 billion.

The system is underpinned primarily by 10-year, take-or-pay contracts.

Lastly, Western Gateway is targeting completion in 2029. This is subject to permitting and regulatory approvals.

Western Gateway Pipeline: Project Factsheet

Name: Western Gateway Pipeline System

Project Type: Refined petroleum products pipeline system

Target Enterprise Value: $5.0 billion

Target In-Service Date: 2029 (subject to permitting and regulatory approvals)

Primary Objective: Deliver a cost-effective, resilient fuel supply route connecting St. Louis, Missouri, and expanded Gulf Coast origin points with growing Southwest and West Coast markets in Arizona and California.

Joint Venture Ownership & Governance

• Phillips 66: 49.9%
• Kinder Morgan: 35.1%
• HF Sinclair: 15.0%

System Specifications & Capacity

• Total Length: 1,300 miles
• Initial Design Capacity: 230,000 barrels per day (bpd)
• Expansion Potential: Designed for future capacity expansions with minimal additional capital. Also, no new pipeline construction required.
• Origin Points: St. Louis, MO; Gulf Coast refining centers; Borger, TX.
• Destination Markets: Phoenix & Tucson, AZ; Southern California; Las Vegas, NV (via connection to Kinder Morgan’s CALNEV Pipeline).

Asset Breakdown & Route Design

1. New Construction

• Borger-to-Phoenix Segment: 900 miles of new 20-inch and 24-inch pipeline extending from Borger, TX, to Phoenix, AZ.
• Developer/Operator: Phillips 66.

Contributed Infrastructure (Kinder Morgan)

• Contributed Value: $1.5 billion
• SFPP East Line: Connects El Paso, TX, to Phoenix and Tucson, AZ.
• SFPP West Line: Connects Colton, CA, to Phoenix, AZ.
• Flow Direction Change: The SFPP West Line will be reversed to transport refined products east-to-west directly into California.
• Operator: Kinder Morgan will continue operating both SFPP lines.

Feeder Assets and Flow Reversals

• Gold Pipeline (Phillips 66): Reversing flow direction (previously Borger to St. Louis) to transport refined products from Midwest/Gulf Coast refineries (via Explorer Pipeline connection) toward Borger, TX, feeding into Western Gateway.

Financial Structure and Capital Contributions

• Total Enterprise Value: $5.0 billion

Cash Contributions:

• Phillips 66: $2.5 Billion
• HF Sinclair: $750 million

Asset Contribution:

• Kinder Morgan: $1.5 billion (SFPP East and West Line assets, transferred upon completion of the Borger-to-Phoenix segment).

Commercial Profile

• Contract Structure: Underpinned primarily by 10-year, take-or-pay transportation service contracts.
• Commercial Viability: Validated by open season shipper commitments providing predictable, fee-based cash flow returns.

Project Team

Phillips 66:

• Role: Lead project developer & primary operator

Kinder Morgan, Inc.:

• Role: Infrastructure contributor & segment operator

HF Sinclair Corporation:

• Role: Strategic equity partner and core shipper

Related Subsidiaries and System Interconnects

• SFPP, L.P.: A operating subsidiary of Kinder Morgan contributing the SFPP East Line (El Paso to Phoenix/Tucson) and SFPP West Line (Colton to Phoenix).
• Explorer Pipeline Company: An interconnected pipeline system that feeds refined products into Phillips 66’s Gold Pipeline to supply the Western Gateway system.